Burmer CoHas Accumulated Data to Use in Preparing Its Annual Profit

question 41

Multiple Choice

Burmer Co.has accumulated data to use in preparing its annual profit plan for the upcoming year.The cost behavior pattern of the maintenance costs must be determined.Data regarding the machine hours and maintenance costs for the last year and the results of the regression analysis are as follows:
A staff assistant has run regression analyses on the data and obtained the following output using Excel:
The 95% confidence range for a prediction of monthly manufacturing cost using the model is:

• A)From $631 to $936
• B)From $6.49 to $7.06
• C)The range of +/- $47.06 around the predicted amount
• D)The range of +/- $47.06 x 2 = $94.12 around the predicted amount The standard error of the estimate is the basis for assessing the confidence range around the predicted amount;for 95% confidence,the range is equal to two multiplied times SE

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